• Economy of scale: This refers to the fact that the combined company can often reduce its fixed costs by removing duplicate departments or operations, lowering the costs of the company relative to the same revenue stream, thus increasing profit margins.
• Increased revenue or market share: This assumes that the buyer will be absorbing a major competitor and thus increase its market power (by capturing increased market share) to set prices.
• Cross-selling: For example, a bank buying a stock broker could then sell its banking products to the stock broker’s customers, while the broker can sign up the bank’s customers for brokerage accounts. Or, a manufacturer can acquire and sell complementary products.
• Synergy: For example, managerial economies such as the increased opportunity of managerial specialization. Another example are purchasing economies due to increased order size and associated bulk-buying discounts.
• Taxation: A profitable company can buy a loss maker to use the target’s loss as their advantage by reducing their tax liability. In the United States and many other countries, rules are in place to limit the ability of profitable companies to “shop” for loss making companies, limiting the tax motive of an acquiring company.
• Geographical or other diversification: This is designed to smooth the earnings results of a company, which over the long term smoothens the stock price of a company, giving conservative investors more confidence in investing in the company. However, this does not always deliver value to shareholders (see below).
• Resource transfer: resources are unevenly distributed across firms (Barney, 1991) and the interaction of target and acquiring firm resources can create value through either overcoming information asymmetry or by combining scarce resources.
• Vertical integration: Vertical integration occurs when an upstream and downstream firm merge (or one acquires the other). There are several reasons for this to occur. One reason is to internalize an externality problem. A common example is of such an externality is double marginalization. Double marginalization occurs when both the upstream and downstream firms have monopoly power, each firm reduces output from the competitive level to the monopoly level, creating two deadweight losses. By merging the vertically integrated firm can collect one deadweight loss by setting the upstream firm’s output to the competitive level. This increases profits and consumer surplus. A merger that creates a vertically integrated firm can be profitable. Vertical integration may also be driven by reduction of transaction costs (particularly credit related) and risk mitigation

However, on average and across the most commonly studied variables, acquiring firms’ financial performance does not positively change as a function of their acquisition activity. Therefore, additional motives for merger and acquisition that may not add shareholder value include:

• Diversification: While this may hedge a company against a downturn in an individual industry it fails to deliver value, since it is possible for individual shareholders to achieve the same hedge by diversifying their portfolios at a much lower cost than those associated with a merger.
• Manager’s hubris: manager’s overconfidence about expected synergies from M&A which results in overpayment for the target company.
• Empire-building: Managers have larger companies to manage and hence more power.
• Manager’s compensation: In the past, certain executive management teams had their payout based on the total amount of profit of the company, instead of the profit per share, which would give the team a perverse incentive to buy companies to increase the total profit while decreasing the profit per share (which hurts the owners of the company, the shareholders); although some empirical studies show that compensation is linked to profitability rather than mere profits of the company.

The Transition Companies’ Canadian office will offer M&A advisory services to Canadian business owners, M&A buyer sourcing and Business Optimization to Canadian companies that seek to improve performance now and the value of their company’s for a future sale.

Gene Sartin CEO and President of TTC pointed out “TTC is already an international firm working with buyers around the world seeking companies to acquire in the US. The office in Canada will also position TTC to help owners of Canadian companies get the life they want as they plan to exit their companies.”

Michael Ryan, Executive Vice President of TTC said “The office in Canada is a natural extension for us. In many vertical markets and in many M&A market strata, Canadian companies are historically the number one acquirers of US companies.”

The Transition Companies is the pre-eminent professional services firm providing complete exit and transition strategies for owners of privately- held companies seeking to maximize the proceeds from the sale of their companies or increase earnings or business enterprise value, prior to going to market.

Originally founded in 1988, The Transition Companies is headquartered in Dallas, Texas with major offices in New Jersey, California, Colorado and Florida as well as 15 sub offices throughout the US. TTC has over 100 Associates internationally.

Contact:
The Transition Companies
Richard D Parker, Executive Director
5080 Spectrum Drive, Suite 310W
Addison, Texas 75001 United States
Phone: 972-450-3100
www.TransitionCompanies.com

Dallas, TX, August 27, 2009 –(PR.com)– The Transition Companies (“TTC”) is pleased to announce its merger with RMA Consulting, a boutique middle market M&A firm located in Denver, CO. According to Gene Sartin, CEO of The Transition Companies, “Michael Allen’s 20 years of investment banking and international M&A experience along with his reputation and exceptional ability to forge and maintain major client relationships was instrumental in the decision to merge the two firms.” In the position of Senior Managing Director, Mr. Allen will oversee the strategic growth of the firm and the expansion of the new Denver office and the Rocky Mountain region.

Transition Companies, headquartered in Dallas, TX is a leading middle market Mergers & Acquisition (“M&A”) firm specializing in M&A, recapitalization’s, divestitures, corporate finance and turnaround consulting. The Transition Companies was founded in 1988 as a consulting and M&A firm called Succel Corporation. Succel originally provided turnaround consulting to increase the value of privately- held companies. The company built a strong reputation within the private equity arena and provided high level turnaround consulting for many portfolio companies and privately- held companies. In the mid 1990’s, Succel expanded into a full service M&A and consulting firm.

In mid 2008, The Transition Companies was formed through the merger of Succel and InterPrise M&A, LLC (“InterPrise”). InterPrise, founded in 1994 with 3 US offices and 1 European office, was an international middle market M&A firm that specialized in the sale of privately-held companies.

Mike Ryan, Executive Vice President of TTC stated, “the merger of RMA Consulting was a natural fit for our strategic growth plans and helps position the company by broadening its reach into the Rocky Mountain region and beyond. Mike’s reputation, work ethic and vision will help lead us to the next phase of our growth.”

Mike Allen, founder of RMA Consulting stated, “We are excited about the merger and the positioning of Transition Companies. I have worked closely with Mr. Sartin over the last 10 years and I am very proud to be part of his team. Gene’s leadership is next to none and I look forward to being part of the most dynamic middle- market M&A firm in North America.”

RMA Consulting, founded by Mr. Allen in 2005, is a boutique M&A and consulting firm. RMA Consulting was directly involved in over 400 client engagements including M&A, recapitalizations, consulting and valuation opinions. Prior to forming RMA Consulting, Mr. Allen was Senior Managing Director of McGladrey Capital Markets, a subsidiary of H&R Block. Previously, Mr. Allen served as managing partner of DTF Management, a private equity group specializing in technology based companies. As an entrepreneur Mr. Allen founded and operated three companies in the consulting, distribution and technology sectors. Mr. Allen was CEO of Bitfield Technologies, LLC which was the parent company of Bitfield, OY based in Helsinki Finland. Bitfield was a leading developer of hardware and software for the videoconferencing market. Mr. Allen acquired and recapitalized the company implementing a complete turnaround and then sold it to a public European company.

With the merger of RMA Consulting, The Transition Companies now has offices in Texas, New Jersey/New York, California & Colorado.

Contact:
The Transition Companies
Richard D Parker, Executive Director
5080 Spectrum Drive, Suite 310W
Addison, Texas 75001
United States
Phone: 972-450-3100

www.transitioncompanies.com

In mid 2008, The Transition Companies was formed through the merger of Succel with InterPrise M&A LLC (”InterPrise”). InterPrise, founded in 1994 with 3 US offices and 1 European office, was a leading nationwide middle market M&A firm that specialized in the sale of privately-held companies. The Transition Companies is the pre-eminent professional services firm providing complete exit and transition strategies for owners of privately held companies seeking to maximize the proceeds from the sale of their companies or increase value prior to going to market.  

The Transition Companies has 4 offices nationwide and a dedicated professional team of 105 Associates. TTC’s team of professionals has provided valuation and consulting and has executed M&A sale transactions for hundreds of companies across all industry sectors nationwide.

The Transition Companies Advantage:
Providing resources, alternatives and expertise never before available to the owners of privately-held companies.

The Transition Companies maximizes the proceeds from the sale of a privately held company by providing strategies, resources and execution that lead to results.

The Transition Companies offers… Wall Street experience and resources specifically for middle-market companies and…

• the personal attention of a specialized firm
• international resources of a large organization
• the expertise of a middle-market specialist
• the experience of seasoned professionals

Our team of experienced M&A professionals will confidentially open the market for privately-held companies offering the owner multiple options to fully reap the rewards of their hard work.

Is your Company worth as much as you’d like?  Could it be worth more? 

Many business owners are successful experts in their industry but need some objective perspective to take their company to the next level.  We can help. 

The Transition Companies Business Optimization Group specializes in: 

• increasing the profitability of a privately-held company now.
• making the changes needed to increase a Company’s value for a future sale.
• optimizing earnings and the value of your company. 

First…are you satisfied with your company’s profits?  Many business owners are not.  They are so consumed with running their companies that they cannot take an objective look in order to develop and implement strategies to increase profitability and sales and reduce expenses.  This sounds easy, right?  But how?  Sometimes change creates more issues… 

Our role is to analyze a privately-held company, develop executable strategies to increase earnings, and then place one of our professionals on site who will roll up his sleeves and implement our recommendations- along with, and for the business owner. 

We will perform a one and a half day Business Optimization Analysis and evaluate your company in order to isolate its strengths, weaknesses, opportunities and threats.  After extensive analysis and review, we will prepare the SWOT Report…. How do all the moving parts fit?  Could they fit better?  If you change one part, how does it affect the others?  Don’t worry, we understand and we’re on your side. 

Next, we will develop an Optimization Report.  This report is proprietary to The Transition Companies and details how the company could perform under optimal conditions.  This is the second leg of the road map to optimizing your company to increase profits.  You can’t manage what you don’t measure. 

Armed with the SWOT report and the Optimization Analysis, your Transition Companies Business Optimization Professional will provide strategies and implement tactics on-site to get results….increasing the profitability of your company now and its market value for a future sale. 

We at The Transition Companies are so confident in our ability to assist privately held business owners to GET THE LIFE THEY WANT that we target a 3 to 1 ROI for our Business Optimization Clients. When you invest $1 on Business Optimization Fees, you can expect $3 ROI from our efforts now, and, more importantly; increase in the company’s value and marketability.  It’s a win/win now and in the future. 

In today’s world, if you’re not moving forward proactively…you’re falling behind!!! 

The Transition Companies can keep you ahead of the curve.

Regional Wholesaler of Beverages, Convenience-Store Items and Sundries

50-Year-Old Company Enjoys 90% Customer-Loyalty

Business Description

Over the course of its fifty years the Company has established itself as a dominant regional wholesaler of the types of products typically found in convenience stores, principally non-alcoholic beverages, tobacco products, convenience-food items such as candy and snack products, groceries, and health-and-beauty products.  Including four sovereign native-American nations, it sells to over 500 customers, who, on average, order 50 times a year.  Customer loyalty is very strong – 90% of sales are generated by repeat customers – a consequence of the Company’s long history, its emphasis on customer service, its dependable supplier relationships and its proprietary information technology and internal systems which undergird reliable distribution and service.  The firm stocks and delivers thousands of SKUs, making it a one-stop source for retailers.  The Company maintains exclusive and non-exclusive distribution agreements with prominent manufacturers including Hershey, Phillip Morris, M&M/Mars and Sobe Beverages.

In addition to the principal wholesale business the Company and its affiliates operate two regional dispensed-beverage-distribution businesses: one of bottled-water, the other of a nationally branded frozen-confection.  In the case of each, the Company owns the dispensing equipment and sells its customers supplies at a high margin.

Finally, in a city within its distribution region, the Company operates a retail outlet which in 2007 generated $2.25 million in sales.

Management believes there are significant growth opportunities in three areas:   1] The bottled-water distributor enjoys a virtual monopoly in its market and yet has less than three-percent market penetration, by management estimates.  2] The frozen-confection distributor has untapped opportunities in the educational market.  3] The Company is eligible to secure a beer-distribution license, possesses the necessary infrastructure and has identified brewers in need of such distribution.

Who Would Buy This Company?

Ø  Manufacturer seeking northeast-region distribution channel for its own products.

Ø  National or super-regional wholesale distribution company.

Ø  Strategic player seeking consolidation in wholesale distribution chain.

Ø  Entrepreneur able to leverage 50 years experience and goodwill.

Ø  Company or organization seeking strong commercial relationship with Indian Nations.

Ø  Manufacturer of food, beverage or tobacco products.

Ø  Bottled-water company looking to exploit ripe regional growth opportunity.

For further information regarding Client # B64905
you are invited to contact:

 The Transition Companies

5080 Spectrum Dr., Suite 310W Addison, TX 75001

Telephone: 972.450.3100 Facsimile: 972.450.3101